Legislature(2013 - 2014)BUTROVICH 205

03/25/2014 01:30 PM TRANSPORTATION


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Audio Topic
01:30:14 PM Start
01:30:37 PM SB211
02:48:09 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled TELECONFERENCED
Including But Not Limited to:
+= SB 211 STATE LAND AND MATERIALS TELECONFERENCED
Heard & Held
+= SB 94 RIGHTS-OF-WAY TELECONFERENCED
Scheduled But Not Heard
+= SB 197 NATURALLY OCCURRING ASBESTOS TELECONFERENCED
Scheduled But Not Heard
+= HJR 10 CONST. AM: TRANSPORTATION FUND TELECONFERENCED
Scheduled But Not Heard
                    ALASKA STATE LEGISLATURE                                                                                  
                SENATE TRANSPORTATION COMMITTEE                                                                               
                         March 25, 2014                                                                                         
                           1:30 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Dennis Egan, Chair                                                                                                      
Senator Fred Dyson, Vice Chair                                                                                                  
Senator Hollis French                                                                                                           
Senator Anna Fairclough                                                                                                         
Senator Click Bishop                                                                                                            
                                                                                                                              
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 211                                                                                                             
"An  Act  providing  for the  Department  of  Transportation  and                                                               
Public Facilities  to hold  the surface  estate of  certain state                                                               
land;  relating  to  the  transfer  of  certain  state  land  and                                                               
materials;  relating  to the  lease,  sale,  or disposal  by  the                                                               
Department of Transportation and Public Facilities of rights-of-                                                                
way, property  interests, or improvements; relating  to the grant                                                               
of certain  easements over  submerged state  land to  the federal                                                               
government; relating  to the conveyance of  land for right-of-way                                                               
purposes from  the Alaska Railroad Corporation  to the Department                                                               
of  Transportation and  Public Facilities;  and providing  for an                                                               
effective date."                                                                                                                
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 94                                                                                       
"An Act vacating  a portion of the Copper Center  - Valdez right-                                                               
of-way;  relating  to  rights-of-way  acquired  under  former  43                                                               
U.S.C.  932 that  cross land  owned by  a private  landowner; and                                                               
relating to the use of eminent domain to realign a right-of-                                                                    
way."                                                                                                                           
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
SENATE BILL NO. 197                                                                                                             
"An  Act extending  the  termination date  of  the Department  of                                                               
Transportation   and    Public   Facilities'    interim   project                                                               
authorization regarding naturally occurring asbestos; and                                                                       
providing for an effective date."                                                                                               
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
CS FOR HOUSE JOINT RESOLUTION NO. 10(FIN)                                                                                       
Proposing amendments to the Constitution of the State of Alaska                                                                 
creating a transportation infrastructure fund.                                                                                  
                                                                                                                                
     -SCHEDULED BUT NOT HEARD                                                                                                   
                                                                                                                                
REVIOUS COMMITTEE ACTION                                                                                                      
                                                                                                                                
BILL: SB 211                                                                                                                  
SHORT TITLE: STATE LAND AND MATERIALS                                                                                           
SPONSOR(s): TRANSPORTATION                                                                                                      
                                                                                                                                
03/07/14       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/07/14       (S)       TRA                                                                                                    
03/11/14       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                           
03/11/14       (S)       Heard & Held                                                                                           
03/11/14       (S)       MINUTE(TRA)                                                                                            
03/18/14       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                           
03/18/14       (S)       -- MEETING CANCELED --                                                                                 
03/20/14       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                           
03/20/14       (S)       <Bill Hearing Canceled>                                                                                
03/25/14       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
DANA OWEN                                                                                                                       
Staff to the Senate Transportation Committee                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented SB 211 to the committee.                                                                        
                                                                                                                                
SEAN LYNCH, Assistant Attorney General                                                                                          
Civil Division                                                                                                                  
Transportation Section                                                                                                          
Department of Law (DOL)                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered legal issue questions related to SB
211 and explained that the Amendment would conform language in                                                                  
the bill to language in CSHB 371(TRA).                                                                                          
                                                                                                                                
JULIE SMITH, representing herself                                                                                               
Ester, Alaska                                                                                                                   
POSITION STATEMENT: Expressed concerns with SB 211.                                                                           
                                                                                                                                
KIM RICE, Deputy Commissioner                                                                                                   
Department of Transportation and Public Facilities (DOTPF)                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Supported SB 211 and said the reason for the                                                              
bill is to streamline the process.                                                                                              
                                                                                                                                
JOHN BENNETT, Right-of-Way Chief                                                                                                
Northern Region                                                                                                                 
Department of Transportation and Public Facilities (DOTPF)                                                                      
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Supported SB 211.                                                                                         
                                                                                                                                
LISA WEISSLER, representing herself                                                                                             
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Noted some issues of concern with SB 211.                                                                 
                                                                                                                                
JOHN BITNEY, State Governmental Liaison                                                                                         
Office of the Mayor                                                                                                             
North Slope Borough                                                                                                             
Barrow, Alaska                                                                                                                  
POSITION STATEMENT: Expressed concern especially with section 15                                                              
of SB 211.                                                                                                                      
                                                                                                                                
ED FOGELS, Deputy Commissioner                                                                                                  
Department of Natural Resources (DNR)                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Supported SB 211.                                                                                         
                                                                                                                                
WYN MENEFEE, Chief of Operations                                                                                                
Division of Mining land and water                                                                                               
Department of Natural Resources (DNR)                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Answered questions relating to SB 211.                                                                    
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:30:14 PM                                                                                                                  
CHAIR  MIKE  DUNLEAVY  called  the   Senate  Labor  and  Commerce                                                             
Standing Committee meeting  to order at 1:30 p.m.  Present at the                                                               
call to order were Senators  Dyson, French, Fairclough, and Chair                                                               
Egan.                                                                                                                           
                                                                                                                                
CHAIR EGAN announced that SB 94, SB 197, and perhaps HJR 10                                                                     
would not be heard today.                                                                                                       
                                                                                                                                
                SB 211-STATE LAND AND MATERIALS                                                                             
                                                                                                                                
1:30:37 PM                                                                                                                    
CHAIR EGAN announced  SB 211 to be back up  for consideration. He                                                               
removed  his  objection and  invited  his  staff to  explain  the                                                               
proposed Amendment 1, labeled 28-LS1544\U.1...                                                                                  
                                                                                                                                
DANA OWEN,  staff to the Senate  Transportation Committee, Alaska                                                               
State  Legislature, said  the  Department  of Transportation  and                                                               
Public  Facilities (DOTPF)  suggested  some  language changes  to                                                               
Section 16  of the  bill. It attempts  to clarify  some confusion                                                               
that arose  in discussing  Section 16.  The amendment  would also                                                               
bring the bill into alignment  with the House companion bill that                                                               
passed  out of  the House  Transportation Committee  recently. He                                                               
invited Sean  Lynch from the  Department of Law (DOL)  to explain                                                               
the legal reasoning.                                                                                                            
                                                                                                                                
1:32:51 PM                                                                                                                    
SEAN  LYNCH, Civil  Division, Transportation  Section, Department                                                               
of Law (DOL), said this amendment  conforms language in SB 211 to                                                               
language  in  CSHB  371(TRA).   The  amendment  clarifies  public                                                               
comment that expressed  concern that Section 16 could  be read as                                                               
a  directive to  the commissioner  of the  Department of  Natural                                                               
Resources (DNR)  to issue any remaining  submerged land easements                                                               
under  the reciprocal  easement  agreement with  the U.S.  Forest                                                               
Service, which  was not the  intent of the section.  This section                                                               
now  clarifies that  the DNR  commissioner has  the authority  to                                                               
remove the 55-year limitations on submerged land easements.                                                                     
                                                                                                                                
SENATOR DYSON moved to adopt Amendment 1.                                                                                       
                                                                                                                                
                                                 28-LS1544\U.1                                                                  
                                                      Bullock                                                                   
                                                      3/25/14                                                                   
                                                                                                                                
                          AMENDMENT 1                                                                                         
                                                                                                                                
     OFFERED IN THE SENATE                  BY SENATOR EGAN                                                                     
       TO: SB 211                                                                                                               
                                                                                                                                
     Page 1, line 5:                                                                                                            
          Delete "grant of certain easements over submerged                                                                   
     state land to"                                                                                                           
          Insert "term for certain easements or rights-of-                                                                    
     way that are part of a reciprocal exchange with"                                                                         
                                                                                                                                
     Page 8, lines 12 - 20:                                                                                                     
          Delete all material and insert:                                                                                       
          "TERM OF CERTAIN EASEMENTS TO IMPLEMENT A                                                                             
     RECIPROCAL  EXCHANGE. The  easements identified  on the                                                                    
     map numbered  92337 and dated  June 15, 2005,  and that                                                                    
     are  part of  the reciprocal  exchange of  easements or                                                                    
     rights-of-way  and easements  enacted into  federal law                                                                    
     under 119  Stat. 1177, may have  a term of years  for a                                                                    
     period of  more than  55 years  if the  commissioner of                                                                    
     natural resources determines the  length of the term to                                                                    
     be in the best interest of the state."                                                                                     
                                                                                                                                
SENATOR FRENCH objected for discussion  purposes. He referenced a                                                               
letter sent  to this committee  on 3/13  by DOTPF, signed  by Kim                                                               
Rice, that says  Section 16 is constitutional.  He questioned the                                                               
need for the change in language if Section 16 is constitutional.                                                                
                                                                                                                                
1:35:08 PM                                                                                                                    
SENATOR BISHOP joined the committee.                                                                                            
                                                                                                                                
MR.  LYNCH said  the concern  in  public testimony  was that  the                                                               
easements  are  "granted"  to  the   U.S.  Forest  Service.  That                                                               
sentence  in the  existing  bill mirrored  the  federal law  that                                                               
authorizes the reciprocal exchange  of easements. The comment was                                                               
that  by  saying  the  easements are  hereby  granted,  they  are                                                               
granted without  public notice and  comment and that  granting of                                                               
the easements  would violate the Constitution.  So, the provision                                                               
was rewritten  to not  mirror the  federal provision  by removing                                                               
the word "grant."                                                                                                               
                                                                                                                                
SENATOR FRENCH said your position is  that it is fine as written,                                                               
but you are being even more careful now by using this amendment.                                                                
                                                                                                                                
MR. LYNCH said that is correct.                                                                                                 
                                                                                                                                
SENATOR FRENCH removed his objection.                                                                                           
                                                                                                                                
1:38:10 PM                                                                                                                    
JULIE  SMITH,  representing  herself,  Ester,  Alaska,  said  she                                                               
addressed this  letter to the Senate  Transportation Committee in                                                               
the House Resources  Committee. This is the third  letter she has                                                               
written   related   to  SB   211.   The   first  raised   several                                                               
constitutional  questions  and  provided   a  list  of  practical                                                               
implementation questions  related to the bill.  The second letter                                                               
attempted  to connect  the  dots of  how the  flow  of money  and                                                               
management responsibility would change as  a result of SB 211. In                                                               
some  ways  this letter  is  a  follow-up as  further  reflection                                                               
helped her recognize that a good  deal of confusion related to SB
211  results from  the lack  of a  fiscal note  that details  the                                                               
impacts  this legislation  would have  on the  budgets of  DOTPF,                                                               
DNR, and the state general fund.                                                                                                
                                                                                                                                
1:41:38 PM                                                                                                                    
She related that  the reason she cares enough about  this bill to                                                               
keep  writing  about  it  is   that  she  has  many  friends  and                                                               
colleagues who work at both DOTFPF  and DNR in Fairbanks who have                                                               
earned her respect and gratitude.                                                                                               
                                                                                                                                
She also appreciated DNR's role  in ensuring that the complex web                                                               
of rights and  responsibilities related to land use  in Alaska is                                                               
protected for  the benefit of all  Alaskans. In its role  of land                                                               
manager,  DNR's mandate  provides  an expanded  focus that  looks                                                               
beyond a  current project and  includes a wide range  of multiple                                                               
uses and environmental impacts.                                                                                                 
                                                                                                                                
She said she  was concerned that SB 211 would  upset the existing                                                               
balance  between DOTPF  and DNR  in ways  that would  degrade the                                                               
constitutional and  environmental protections  currently embedded                                                               
in  Alaska's land  management system,  especially the  provisions                                                               
that would diminish  DNR's management role or  transfer title and                                                               
best control of material sites  to DOTPF. These provisions are in                                                               
Sections 3, 5, 8, and 13.                                                                                                       
                                                                                                                                
She continued to  say that well managed material  sites provide a                                                               
multitude of  benefits to Alaskans;  material sites that  are not                                                               
managed  well  can diminish  private  property  values and  cause                                                               
significant economic  and environmental harm. This  is especially                                                               
true in  material sites located  within rivers and  flood plains.                                                               
DNR  plays an  important  role in  identifying  these issues  and                                                               
finding solutions that provide DOTPF  with the gravel it needs to                                                               
maintain Alaska's  infrastructure while also  protecting Alaska's                                                               
land and resources for current and future generations.                                                                          
                                                                                                                                
MS. SMITH  said she understands DOTPF's  frustration with onerous                                                               
levels of  oversight, but she  is concerned that the  pendulum is                                                               
swinging  too  far in  the  opposite  direction. In  2009,  DOTPF                                                               
acquired authority  to conduct its  own NEPA reviews for  most of                                                               
its  federally  funded  projects.  In 2011,  the  Alaska  Coastal                                                               
Management  Program  was  relieving DOTPF  of  significant  state                                                               
oversight  of many  material sites  located in  rivers and  flood                                                               
plains. Now  DOTPF is attempting  to diminish or  eliminate DNR's                                                               
management role and this is  happening in the wake of significant                                                               
statutory  changes in  2012 that  were  specifically designed  to                                                               
streamline  material  sales in  Alaska.  Even  with these  recent                                                               
changes  that  reduce  the  role of  other  agencies  in  DOTPF's                                                               
projects, it seems that SB 211 goes too far.                                                                                    
                                                                                                                                
MS.  SMITH said  she  expressed  her concerns  in  her first  two                                                               
letters,  but  she  is  concerned  about  the  bill  itself.  She                                                               
realized  finally  that   one  reason  it  is   so  difficult  to                                                               
understand is that  presentation of the bill has  not included an                                                               
accounting of the  fiscal changes that will result  to DOTPF, DNR                                                               
and the general fund as a result.                                                                                               
                                                                                                                                
For example Sections  3, 5 and 8 of the  bill require surveys and                                                               
title  transfers  of  the  hundreds  of  parcels  of  state  land                                                               
involved in  airports, highways,  public facilities  and material                                                               
sites included in the bill. She  asked what the expected price is                                                               
for obtaining these surveys and  conveyances of title. Section 13                                                               
changes  the fiscal  management of  material sales  in Alaska  so                                                               
that  DNR would  no longer  charge DOTPF  or its  contractors for                                                               
material. "How  much money  are we talking  about and  will DOTPF                                                               
simply keep  these funds in its  own budget, and if  so, are they                                                               
required to  provide an accounting  of how SB 211  shifts funding                                                               
from DNR  and the general fund  to DOTPF? If there  is some other                                                               
fiscal impact that will result from the shift, what is it?"                                                                     
                                                                                                                                
AS  24.08.035 states  that fiscal  notes attached  to bills  must                                                               
include,  among  other  things, the  fiscal  impact  on  existing                                                               
programs  in line  item details  of  those impacts.  This is  not                                                               
optional; it's required, she stated.                                                                                            
                                                                                                                                
MS.  SMITH said  her research  related  to this  bill helped  her                                                               
glean an  understanding of the fiscal  impact of SB 211.  But the                                                               
fiscal  notes attached  to the  bill  indicate there  will be  no                                                               
fiscal impact.  So, she respectfully requested  sending this bill                                                               
to the  Legislative Finance Division  for a fiscal  analysis. She                                                               
also  asked for  an opportunity  to provide  comment on  the bill                                                               
after  that  analysis therefore  holding  the  bill in  committee                                                               
until then.                                                                                                                     
                                                                                                                                
SENATOR FRENCH  said he read her  first two letters, but  not the                                                               
third.                                                                                                                          
                                                                                                                                
MS. SMITH said she  just read the third one now  and will send it                                                               
to him.                                                                                                                         
                                                                                                                                
1:46:45 PM                                                                                                                    
KIM RICE,  Deputy Commissioner, Department of  Transportation and                                                               
Public  Facilities (DOTPF),  Anchorage, Alaska,  said the  reason                                                               
for the bill is to  streamline the disposal processes by reducing                                                               
bureaucracy  in  development   of  transportation  projects.  She                                                               
explained  that land  and  resource management  goes  to DNR  and                                                               
transportation management  goes to  DOTPF, but  there is  a great                                                               
deal of  overlap, because transportation  has to access  lands to                                                               
develop transportation projects.                                                                                                
                                                                                                                                
1:49:10 PM                                                                                                                    
MS.  RICE said  she would  first explain  transportation projects                                                               
and the  public process. She  said the  DOTPF is very  focused on                                                               
projects as opposed to the  DNR, which is concerned with managing                                                               
massive  pieces  of land.  When  DOTPF  does a  project,  despite                                                               
popular opinion,  even on state-funded projects,  they go through                                                               
the  National  Environmental Policy  Act  (NEPA)  process. It  is                                                               
required  on  every  project  because it's  hard  to  miss  every                                                               
possible impacted resource along the  way if anything more than a                                                               
repave job is being done. They  have check lists for repave jobs,                                                               
which tell  them which  resources they might  need and  what they                                                               
need to consider in getting them.                                                                                               
                                                                                                                                
MS.  RICE   said  they  developed   a  flow  chart   showing  the                                                               
differences between a federal highway  project and a state-funded                                                               
project. NEPA can  be done in conjunction with  design for state-                                                               
funded  projects, whereas  highway projects  are done  in a  more                                                               
linear fashion,  which includes public  notice and  getting input                                                               
on  which resources  are impacted  by  the project.  It does  not                                                               
address what  happens to get  an infrastructure project  in place                                                               
in order for a community to do a project.                                                                                       
                                                                                                                                
1:51:14 PM                                                                                                                    
State  Transportation  Improvement  Program (STIP)  projects  are                                                               
done first. They go through  a public notice process and identify                                                               
specific funding.  Then, it  gets down  to the  environmental and                                                               
preliminary design phase. It's at  this phase that they scope the                                                               
project  with  all  the  resource agencies.  This  is  when  they                                                               
determine if there  are potential resource issues.  It depends on                                                               
what comes  back as to where  they go on a  project. Alternatives                                                               
could  be anything  from a  spaghetti  map of  alternatives to  a                                                               
single alternative that  only addresses the problem  as it's been                                                               
defined.                                                                                                                        
                                                                                                                                
At  the  end  of  the  process  they  publish  the  environmental                                                               
document,  called  the  location   approval,  which  shows  which                                                               
corridor they  are going  to be  on when they  start to  design a                                                               
project. During this  time there is a bigger  emphasis on talking                                                               
to the Division  of Mining, Land and Water to  make sure that any                                                               
applications  for  land  use  they  might  be  going  across  are                                                               
included in the  NEPA process. He commented that  it's really too                                                               
late when you  get to the end  of a project to  discover there is                                                               
another alternate  use suggested.  They then  go to  final design                                                               
and get local government approval.                                                                                              
                                                                                                                                
1:54:44 PM                                                                                                                    
JOHN BENNETT, Right-of-Way Chief,  Northern Region, Department of                                                               
Transportation and  Public Facilities (DOTPF), said  he wanted to                                                               
follow up more on their  proposal to modify the disposal language                                                               
across all  three of their  authorities: aviation,  highways, and                                                               
public  facilities. He  explained  that they  have had  recurring                                                               
problems with  their existing disposal  language. One  issue they                                                               
are  trying to  resolve is  related to  the Eureka  Lodge on  the                                                               
Glenn  Highway.  He  explained   that  DOTPF  manages  a  highway                                                               
easement in front of the  lodge, but their authority extends only                                                               
to the  vacation or  release of that  highway easement.  DNR owns                                                               
the underlying fee estate. In  this situation the adjoining owner                                                               
has encroached  in the ROW  by putting  in sewage lagoons,  so he                                                               
needs to  resolve that problem  because he can't  operate without                                                               
them working and neither can he sell the operation.                                                                             
                                                                                                                                
The department  decided it  could vacate a  small amount  of land                                                               
that would solve  his problem, but by vacating  the easement, all                                                               
that  would happen  is that  it would  become DNR's  problem, and                                                               
they couldn't solve it because  it wouldn't meet the requirements                                                               
for a  preference right sale.  Using the modified language  in SB
211 would solve  his problem by virtue of the  fact that Sections                                                               
1,  6, and  9 would  vest  fee title  to the  surface estate  for                                                               
existing  highway  facilities  in  DOTPF; that  would  give  them                                                               
authority to convey fee estate.  Also, language in Sections 2, 4,                                                               
and 10,  which relate to  the disposal language would  allow them                                                               
to convey title to the  private party without having to re-convey                                                               
it  back  to  DNR.  This  is one  solution  that  could  be  used                                                               
appropriately many times.                                                                                                       
                                                                                                                                
MR.  BENNETT said  the other  significant problem  they have  had                                                               
started with language  in Title 35 relating  to public facilities                                                               
that says  when the department  has acquired a piece  of property                                                               
and  then determines  that it  is  no longer  necessary to  their                                                               
needs, they can dispose of it,  but title reverts to the persons,                                                               
heirs,  or successors  in  whom  it was  vested  at  the time  of                                                               
taking.  That may  sound like  a good  idea, but  what happens  -                                                               
using Fort  Yukon as an example  where they acquired a  parcel of                                                               
land to build  some trooper housing. The troopers  moved out, the                                                               
use  changed and  it was  no longer  necessary and  the community                                                               
wanted to  acquire that  land. But  because of  this restriction,                                                               
there was  no mechanism by  which to  convey it to  the community                                                               
and the original owners were no  longer anywhere to be found. So,                                                               
that kind of restriction prevents  a resolution and it can create                                                               
some other unintended consequences depending  on how the land was                                                               
acquired -  if they acquired a  strip versus a total  parcel, for                                                               
instance. They  don't want  to end  up land-locking  someone. So,                                                               
they believe  this modified uniform  language will go a  long way                                                               
to solve their problems as well  as the problems of the adjoining                                                               
property owners.                                                                                                                
                                                                                                                                
1:58:22 PM                                                                                                                    
SEAN LYNCH, Assistant Attorney General,  Department of Law (DOL),                                                               
said he wanted  to address what they are trying  to do in Section                                                               
13,  an exemption  to the  Alaska Lands  Act for  DOTPF's use  of                                                               
materials  owned   by  the   state.  He   said  that   with  road                                                               
construction everyone has  seen how you cut from  the high points                                                               
and fill  in the  low points.  If additional  fill is  needed you                                                               
open  a  material  site.  When   DOTPF  is  done  with  the  road                                                               
construction, they  have an open  rock face that is  the material                                                               
source  or site  (under DNR  statute). Because  DOTPF's (material                                                               
sources) lands are  owned by the state, DNR  statute directs them                                                               
to issue materials sales contracts for use of its materials.                                                                    
                                                                                                                                
So,  when DOTPF  goes to  either maintain  a road  or reconstruct                                                               
their roads  and they  need to  get back  into their  pits, their                                                               
first step  is to go  into DNR under the  Alaska Lands Act  for a                                                               
material sales  contract just  as if it  was another  third party                                                               
developer. This provision  is an exception that is  located in AS                                                               
38.05.030, which contain the exemptions  to the Alaska Lands Act.                                                               
DOTPF  already   has  an  exemption  for   its  acquisitions  and                                                               
disposals  in subsection  (b), and  subsection (d)  exempts DOTPF                                                               
from the material sales requirements.                                                                                           
                                                                                                                                
2:00:22 PM                                                                                                                    
LISA WEISSLER, representing herself,  Juneau, Alaska, said she is                                                               
a former state  attorney and she believes SB 211  has some issues                                                               
that are  worth noting. She  understands what DOTPF is  trying to                                                               
do and feels like  the bill is written in a  way that raises many                                                               
questions  and  that  may  ultimately   cause  issues;  some  are                                                               
constitutional questions that  may work out or not.  She said the                                                               
bill  is written  broadly to  solve some  very specific  problems                                                               
identified by DOTPF  and maybe there is a better  way to go about                                                               
it.                                                                                                                             
                                                                                                                                
One constitutional issue has to  do with the disposals. The state                                                               
land that goes  to DOTPF is still state land.  Under current law,                                                               
when they no longer  need a part of it that goes  back to DNR. In                                                               
this way DNR can  manage it and dispose of it  as it should under                                                               
the  Alaska Lands  Act  - and  of course,  the  Alaska Lands  Act                                                               
implements Article 8 of the  Constitution. SB 211 will now change                                                               
this to  where DOTPF  "may" transfer  the land  back to  DNR; but                                                               
they don't have to.                                                                                                             
                                                                                                                                
MS.  WEISSLER explained  that under  the Lands  Act, DNR  has the                                                               
legislation that is  needed to implement Article 8,  Section 9 of                                                               
the Constitution where  the Legislature may provide  for the sale                                                               
or grant of state land  and establish sales procedures. Now, when                                                               
DOTPF  gets this  land from  the state,  they may  dispose of  it                                                               
under  terms  and  conditions established  by  the  commissioner.                                                               
That's not  a law;  that's just  whatever terms  the commissioner                                                               
comes  up with.  She opined  that the  legislature still  has the                                                               
duty to  have statutes that provide  for the sale of  state land.                                                               
Right  now,  DOTPF  has  authority  for  private  land,  but  not                                                               
necessarily the state land that has been transferred from DNR.                                                                  
                                                                                                                                
She highlighted  multiple use as  the other issue, which  is also                                                               
in Article 8  of the Constitution. She said she  was disturbed by                                                               
DOTPF's negative response to  public comments questioning whether                                                               
material sites would be managed  for public use. The response was                                                               
that they wouldn't because that  land use for government purposes                                                               
is not  included in the public  domain. Article 8 says  lands and                                                               
interests  not  intended  exclusively for  governmental  purposes                                                               
constitute the public domain. The  public domain is land that the                                                               
state is  not using for something  else that can be  settled. So,                                                               
that doesn't  let DOTPF  out of  the constitutional  doctrine for                                                               
managing for multiple use.                                                                                                      
                                                                                                                                
MS.  WEISSLER  said the  other  questions  she  had were  in  the                                                               
drafting: Sections  1, 6  and 9 talk  about DOTPF  having primary                                                               
management  authority  over state  lands.  That  sounds like  DNR                                                               
still has the permitting authority,  but DOTPF can condition that                                                               
permitting  authority.  She  suggested  that  wording  should  be                                                               
clarified.                                                                                                                      
                                                                                                                                
2:05:59 PM                                                                                                                    
JOHN  BITNEY, State  Governmental Liaison,  Office of  the Mayor,                                                               
North Slope Borough,  Barrow, Alaska, said a  letter was provided                                                               
to  the committee  expressing concerns  relating  to the  various                                                               
disposals and  land use process  in various  sections, especially                                                               
Section 15. He  said the properties that are in  that section are                                                               
being transferred from DNR to DOTPF  and have been the subject of                                                               
municipal entitlement  selections for approximately  two decades.                                                               
As they have  had a good working relationship, it  was a surprise                                                               
that it showed up in the  bill. Some aerial photographs seemed to                                                               
encompass all  the property  at those locations  and it  seems to                                                               
overlap  with the  selections  they have  made.  The letter  does                                                               
request  removal   of  the  section.   He  offered   to  answered                                                               
questions.                                                                                                                      
                                                                                                                                
2:07:56 PM                                                                                                                    
CHAIR  EGAN asked  if he  was  referring to  Franklin Bluffs  and                                                               
Happy Valley.                                                                                                                   
                                                                                                                                
MR. BITNEY replied yes.                                                                                                         
                                                                                                                                
CHAIR EGAN thanked  him and finding no  further questions, closed                                                               
public testimony.                                                                                                               
                                                                                                                                
SENATOR FRENCH requested a response  from DOTPF regarding Section                                                               
15.                                                                                                                             
                                                                                                                                
2:08:36 PM                                                                                                                    
MR. BENNET said  they had applications in on  Franklin Bluffs and                                                               
Happy  Valley for  the last  20 years.  These are  very important                                                               
sites  to be  retrained  in  state ownership  and  public use  in                                                               
anticipation  of  increased  resource development  and  increased                                                               
maintenance needs along the Dalton Highway.                                                                                     
                                                                                                                                
SENATOR FRENCH asked how big a dispute there is over the lands.                                                                 
                                                                                                                                
MR. BENNET answered  that their overlays show an  area that would                                                               
be appropriate  to accommodate  an airstrip  and a  building site                                                               
for  a maintenance  station.    He estimated  they  would not  be                                                               
requesting 30-50  percent of the  original selected area.  All of                                                               
their selections for  Happy Valley and Franklin  Bluffs have been                                                               
east of  the Dalton  Highway and there  would still  be remaining                                                               
selection area for the North Slope Borough.                                                                                     
                                                                                                                                
SENATOR FAIRCLOUGH asked  him to explain the  process for getting                                                               
land from  the feds to the  state thinking in terms  of the North                                                               
Anchorage  Land  Agreement that  works  in  conjunction with  the                                                               
state, the  municipality and  the Eklutna  Corporation to  try to                                                               
resolve land use when land disposals become available.                                                                          
                                                                                                                                
MR.  BENNET  said these  are  currently  state owned  lands.  The                                                               
actual municipal entitlement  process has been in  process for 20                                                               
years and there  are perhaps some insurmountable  issues that may                                                               
require legislative action.                                                                                                     
                                                                                                                                
SENATOR  FAIRCLOUGH  commented  that the  legislature  eventually                                                               
would have to make the decisions.                                                                                               
                                                                                                                                
SENATOR  BISHOP said  it appeared  that  section 13  was also  of                                                               
concern to the North Slope Borough. Mr. Bitney nodded yes.                                                                      
                                                                                                                                
SENATOR FAIRCLOUGH  asked what process  others go through  to lay                                                               
claim on property in state ownership.                                                                                           
                                                                                                                                
2:13:41 PM                                                                                                                    
ED FOGELS,  Deputy Commissioner, Department of  Natural Resources                                                               
(DNR),  Juneau, Alaska,  explained that  the North  Slope Borough                                                               
submitted  their selections  and the  department is  adjudicating                                                               
them. At some point they  would be adjudicating those two parcels                                                               
as an administrative action if not  for the bill, and it would be                                                               
up to the DNR commissioner to make the decision.                                                                                
                                                                                                                                
SENATOR  FAIRCLOUGH  asked   what  the  fight  is   over  and  if                                                               
subsurface rights go along with the allocation.                                                                                 
                                                                                                                                
MR.   FOGELS  answered   no;  the   subsurface   estate  is   not                                                               
transferred.  The  complication  is  that  there  are  a  lot  of                                                               
existing  uses  on  those  two   sites  along  with  some  fairly                                                               
significant contamination issues.                                                                                               
                                                                                                                                
SENATOR FAIRCLOUGH asked who the contamination belongs to.                                                                      
                                                                                                                                
WYN MENEFEE,  Chief of  Operations, Division  of Mining  land and                                                               
water,  Department  of Natural  Resources  (DNR),  said there  is                                                               
contamination  on part  of  the  Happy Valley  site.  He said  he                                                               
didn't know  who is  responsible for  the contamination,  but the                                                               
state received both areas from  the federal government. The issue                                                               
is  this  bill  says  DOTPF  should get  the  lands  rather  than                                                               
conveying  it to  the North  Slope Borough  as a  selection going                                                               
through the  normal decision process, which  would consider other                                                               
uses or  demands on  the site including  DOTPF's. The  use issues                                                               
are that  there is an airstrip  and gravel material that  is part                                                               
of  the surface  estate. The  material is  at hand  because DOTPF                                                               
uses the  material; they usually  manage airstrips and  they also                                                               
can manage  the incidental  other permits they  have on  the land                                                               
for commercial guide facilities there and some things like that.                                                                
                                                                                                                                
SENATOR  FAIRCLOUGH asked  if the  properties  were surveyed  and                                                               
available for  conveyance, and the  amount of land that  has been                                                               
requested by North Slope Borough and conveyed.                                                                                  
                                                                                                                                
MR. FOGELS answered  the land has not been surveyed,  but that is                                                               
not required for conveyance.                                                                                                    
                                                                                                                                
SENATOR FAIRCLOUGH asked if they  believe the North Slope Borough                                                               
is only asserting a claim on  this property because of the gravel                                                               
assets  or  some other  reason,  since  the Borough  is  somewhat                                                               
surprised this is on the table  and hadn't been informed that the                                                               
department was going to assert  before the legislature that these                                                               
parcels were off the table.                                                                                                     
                                                                                                                                
MR. FOGELS answered that the  intent of the municipal entitlement                                                               
program is to  convey lands to municipalities so they  can get an                                                               
economic  benefit  to  sustain  their areas  and  see  these  two                                                               
parcels  as important  economic  generators,  and the  department                                                               
should have given them a courtesy phone call.                                                                                   
                                                                                                                                
CHAIR EGAN said those are  former pipeline construction camps and                                                               
he couldn't believe they weren't surveyed.                                                                                      
                                                                                                                                
MR. BENNET  answered that virtually everything  was surveyed back                                                               
in the  day, but their  definition of  the sites they  would like                                                               
transferred from DNR  to DOTPF would be surveyed once  they had a                                                               
funded  project  and  received the  conveyance.  They  intend  to                                                               
construct  a  maintenance station  at  Franklin  Bluffs and  that                                                               
would follow suit.                                                                                                              
                                                                                                                                
2:21:16 PM                                                                                                                    
SENATOR DYSON  remarked that  transferring land  before surveying                                                               
it  is a  very startling  concept. What  at first  seemed like  a                                                               
simple  issue has  become more  complicated and  he thought  they                                                               
were  being asked  to  remove some  barriers  so development  can                                                               
happen. But  people were concerned  about taking away a  bunch of                                                               
protections at  the same time.  He asked  if there is  any public                                                               
process they could  go through for transferring land  from DNR to                                                               
DOTPF without adding to the perception of diminishing rights.                                                                   
                                                                                                                                
MR. BENNET  said the  environmental reviews  they go  through for                                                               
project development  to acquire a new  piece of land from  DNR is                                                               
far more extensive  than possibly what DNR  already goes through.                                                               
In the  sense of the acquisition  of lands section, what  is lost                                                               
now is  that DNR won't go  through a decision making  process and                                                               
public notice  that they  are in  fact turning  the land  over to                                                               
DOTPF.  However, this  bill adds  another  public notice  process                                                               
that wasn't in  the mix before. So,  there is no net  loss on the                                                               
public  involvement process,  which is  very extensive  and their                                                               
ability to  convey information  to the public  to make  sure that                                                               
they are well noticed and protected is going to be well met.                                                                    
                                                                                                                                
2:26:14 PM                                                                                                                    
MR. FOGELS agreed that is what the bill lays out now.                                                                           
                                                                                                                                
SENATOR   BISHOP  said   Section  3   talks  about   that  public                                                               
notification  on transfer  of lands  from one  department to  the                                                               
next as  a public process,  but he wanted  to go back  to Section                                                               
13,  because  it's about  borrow  pits  that he  knows  something                                                               
about, having  once built roads  for a  living. He asked  if this                                                               
bill drills  down into  ROWs for  DOTPF, specifically,  and these                                                               
borrow pits  would fall within  the ROW jurisdiction  for highway                                                               
construction.                                                                                                                   
                                                                                                                                
MR. LYNCH  answered that  borrow pits are  not always  located in                                                               
the ROWs, particularly the borrow pits that DOTPF utilizes.                                                                     
                                                                                                                                
SENATOR  BISHOP said  that  borrow pits  are  usually located  in                                                               
close  proximity to  a project  and asked  if this  bill were  to                                                               
become  law, as  written,  no  money would  change  hands on  the                                                               
materials.   Especially  in   the  advent   of  a   new  pipeline                                                               
construction, would DNR  still be in control of a  new borrow pit                                                               
for a pipeline contract and to make those sales and bids?                                                                       
                                                                                                                                
MR. MENEFEE answered that the  bill does not remove DNR's ability                                                               
to  do material  site designations  and material  sale contracts.                                                               
So, they still have the option  - whether it's a pipeline project                                                               
or a  private individual that wants  to go out and  get materials                                                               
from  state  land. Even  when  DOTPF  requests  the title  to  be                                                               
conveyed  over  for   a  material  site,  they   still  have  the                                                               
capability of doing  a third-party contract out of  that pit even                                                               
though DOTPF has fee simple  ownership of the surface estate. DNR                                                               
could still do  a third-party sale as long as  DOTPF concurs with                                                               
it. If  they need all the  material, they wouldn't do  the third-                                                               
party sale. And  DOTPF could say no because they  may need it for                                                               
another  project  in the  long  term,  but  if there  was  excess                                                               
material they couldn't.                                                                                                         
                                                                                                                                
SENATOR  FAIRCLOUGH asked  how the  money would  be allocated  if                                                               
DOTPF chooses to  sell the pit. She also asked  if the purpose is                                                               
to lower the cost of projects and accounting                                                                                    
                                                                                                                                
2:32:20 PM                                                                                                                    
MR. BENNET  said DOTPF doesn't  have authority to  sell materials                                                               
to third parties  and this bill doesn't grant  that authority, so                                                               
this  bill won't  bring money  into the  department. However,  it                                                               
could result in savings, because  less money would be transferred                                                               
to DOTPF  for state-owned  material that  both highway  funds and                                                               
airport  funds  will  then  be  able to  be  allocated  for  more                                                               
projects.                                                                                                                       
                                                                                                                                
SENATOR FAIRCLOUGH  said she thought  she just heard  that third-                                                               
party sales could happen and she  could see the cost savings, but                                                               
couldn't it  also be said that  if you have federal  dollars in a                                                               
project  and you  don't  pay  for that  gravel  with the  federal                                                               
dollars that DOTPF is losing money.                                                                                             
                                                                                                                                
MR. BENNET answered  he didn't think the state  was losing money;                                                               
it  would  just  have  more money  available  for  projects.  The                                                               
question  she might  have over  third-party sales  is that  DOTPF                                                               
doesn't have authority to sell  to ABC Construction directly; DNR                                                               
retains that authority to sell.                                                                                                 
                                                                                                                                
SENATOR FAIRCLOUGH  asked where the  money goes if it's  sold and                                                               
how it is accounted for.                                                                                                        
                                                                                                                                
SENATOR DYSON  said that is  common for  owner-supplied materials                                                               
to reduce the costs.                                                                                                            
                                                                                                                                
MR. FOGELS  said right now they  are required to charge  DOTPF 50                                                               
cents/cubic yard for gravel for  state highway projects, but with                                                               
this bill they won't have to  charge. So, free materials would be                                                               
going  into state  roads, which  should  lower the  cost of  road                                                               
projects.                                                                                                                       
                                                                                                                                
CHAIR EGAN asked if that 50 cent/yard works into their budget.                                                                  
                                                                                                                                
MR. FOGELS answered yes; it is  an administrative fee that is far                                                               
below the  normal appraised fair  market value they  would charge                                                               
anyone else.  Theoretically, some of  that comes back  as program                                                               
receipts to help  pay for the cost of  administering that program                                                               
for DOTPF,  which they would  no longer have  to do. That  is why                                                               
they have a zero fiscal note.                                                                                                   
                                                                                                                                
SENATOR DYSON voiced an ancillary  concern that all the land gets                                                               
transferred  to  DOTPF  and  won't  reverted  to  DNR,  the  land                                                               
steward. And DOTPF can't be forced to go through that process.                                                                  
                                                                                                                                
2:38:06 PM                                                                                                                    
MR.  FOGELS responded  that from  DNR's perspective,  this allows                                                               
DOTPF to be  able to dispose of some sewage  lagoons built on the                                                               
Glenn  Highway, for  instance. Right  now it  can only  deal with                                                               
parcels that deal with highway projects.                                                                                        
                                                                                                                                
MR. LYNCH added  that creating a new pit under  current law would                                                               
be  a  DNR  authorization  in  the best  interest  of  the  state                                                               
finding. Under the  bill, Sections 3, 5, and 8  make that a DOTPF                                                               
determination,  although it  has to  be reasonably  necessary for                                                               
the project.  In large part  the documents  given to the  DNR for                                                               
the state  best interest finding  would be  much the same  as the                                                               
reasonably necessary ones for DOTPF.                                                                                            
                                                                                                                                
SENATOR DYSON asked at what point  do the borrow pits that belong                                                               
to DOTPF revert to DNR.                                                                                                         
                                                                                                                                
MR. LYNCH  answered that  from the  DOTPF perspective  the borrow                                                               
pit would  become open for public  use. DNR and DOTPF  would have                                                               
to make a best interest  determination under the Alaska Lands Act                                                               
to put it on their list of available pits.                                                                                      
                                                                                                                                
SENATOR DYSON clarified his question:  everything is done; no one                                                               
wants gravel and  there the land sits. When can  title go back to                                                               
DNR?                                                                                                                            
                                                                                                                                
MR. MENEFEE  explained that when  DOTPF says they no  longer need                                                               
the  land,  they   give  notice  to  DNR.  At   that  point,  the                                                               
commissioner  can request  that it  be transferred  back or  not.                                                               
Ultimately, DOTPF gets to decide what  it wants to do per SB 211.                                                               
Giving it back is optional.                                                                                                     
                                                                                                                                
SENATOR DYSON said he could imagine  some folks in the region who                                                               
have  traditional  use of  the  land  would be  more  comfortable                                                               
having the  DOTPF land reverting  automatically to DNR  when they                                                               
are through with it.                                                                                                            
                                                                                                                                
SENATOR  FAIRCLOUGH asked  how a  conflicting municipal  or local                                                               
land use code would be affected under the bill.                                                                                 
                                                                                                                                
2:44:43 PM                                                                                                                    
MR. BENNET  said they have  authorities in  place, such as  in AS                                                               
35,  that  requires  the  department to  comply  with  the  local                                                               
government land use ordinances.                                                                                                 
                                                                                                                                
MR. FOGELS summarized that from  DNR's perspective the bill tries                                                               
to streamline inefficiencies and duplicative bureaucracy.                                                                       
                                                                                                                                
2:46:28 PM                                                                                                                    
MS.  RICE   opined  that  efficiencies   will  result   with  the                                                               
improvements this bill brings.                                                                                                  
                                                                                                                                
CHAIR EGAN  expressed hope that  the departments could  meet with                                                               
the North Slope Borough before this  issue comes up next time. He                                                               
held SB 211 in committee.                                                                                                       
                                                                                                                                
2:48:09 PM                                                                                                                    
CHAIR EGAN found no further business to come before the                                                                         
committee, and adjourned the Senate Transportation Standing                                                                     
Committee meeting at 2:48 p.m.                                                                                                  
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
SB 211-HB 371 comments, Smith 031714.pdf STRA 3/25/2014 1:30:00 PM
HB 371
SB 211
SB 211-HB 371 Letter 2, Smith 031814.pdf STRA 3/25/2014 1:30:00 PM
HB 371
SB 211
CSHJR 10 FIN differences 1.pdf STRA 3/25/2014 1:30:00 PM
HJR 10 - Sponsor Stmt Ver C.pdf STRA 3/25/2014 1:30:00 PM
HJR 10
HJR 10 ATIF H FIN presentation 2-4-14.pdf STRA 3/25/2014 1:30:00 PM
HJR 10
HJR 10 ATIF payout spreadsheet.pdf STRA 3/25/2014 1:30:00 PM
HJR 10
HJR 10 Elements of bill.pdf STRA 3/25/2014 1:30:00 PM
HJR 10
HJR 10 Fiscal Note 2-2-030314-GOV-Y.pdf STRA 3/25/2014 1:30:00 PM
HJR 10
HJR 10 NCSL-AASHTO Alaska profile.pdf STRA 3/25/2014 1:30:00 PM
HJR 10
SB 211 Weissler Comments 032414.pdf STRA 3/25/2014 1:30:00 PM
SB 211
SB 211 North Slope Borough Comments 032414.pdf STRA 3/25/2014 1:30:00 PM
SB 211
SB 94 Dept of Law, Letter to Sen Egan (FINAL) 032514.PDF STRA 3/25/2014 1:30:00 PM
SB 94
SB 211 Lttr supporting - Cruz 032514.pdf STRA 3/25/2014 1:30:00 PM
SB 211
SB 211 AOPA support letter 031414.pdf STRA 3/25/2014 1:30:00 PM
SB 211
SB 211-HB 371 Letter 3, Smith 032514.pdf STRA 3/25/2014 1:30:00 PM
HB 371
SB 211
SB 211 414835 Franklin Bluff municipal selection.pdf STRA 3/25/2014 1:30:00 PM
SB 211
SB 211 414838 Happy Valley municipal selection.pdf STRA 3/25/2014 1:30:00 PM
SB 211
SB 211 lttr supporting - Colaska 032014.PDF STRA 3/25/2014 1:30:00 PM
SB 211
SB 211 DOTPF response NSB Smith Weissler 3-25-2014 comments.pdf STRA 3/25/2014 1:30:00 PM
SB 211